Our retail research team has created 3 stock lists, namely Growth, Value and Yield.
|The Growth List comprises of small-mid capitalisation companies with business catalysts which will potentially grow their earnings in the near future. The Growth portfolio would be suitable for investors looking for higher returns and are willing to tolerate the risk of higher short-term volatility of stock prices.|
|The Value List focuses on companies which are undervalued based on their share prices as compared to the company fundamentals. It would be suitable for conservative investors who prefer price stability and have a longer investment horizon.|
|The Yield List comprises of stocks that provide consistent dividend pay-out. It would be suitable for investors whose primary focus is to gain regular dividend income from their investments.|
March Market Overview
The Singapore market ended flat last month despite a strong start to 2019 as the Fed signalled no plans to raise interest rates this year. While investors initially cheered the decision, stocks quickly reversed course on renewed fears of slowing global economic growth as yield curve turned negative.
Year-to-date, the STI rose 4.7%, giving a total return (including dividends) of 5.1%. On an equal weighted basis, the average gain of the 30 constituent stocks was 8.2%. Notably, only four stocks suffered losses, while 11 chalked up double digit returns with Thai Beverage surging a massive 40.2%.
Against this backdrop, Market Insight’s Growth, Value, Yield (GVY) basket of stocks also achieved a solid average total return of 12.9%, beating the benchmark index by 4.7ppt.
Growth List +24.2% YTD
The Growth portfolio was boosted by the sharp rebound in APAC Realty following cooling measures last year as prices were stable despite slower take-up rates for new launches. The group has also lined up 46 projects totalling 20,000 new homes for launch in FY19 and is deepening its presence in overseas markets.
We took profit on China Sunshine after it released record FY19 net profit but it is unlikely to repeat its stellar performance this year as rubber accelerator prices normalise from exceptionally high levels last year. We will revisit the stock if there is any sign of ASP improvement or faster-than-expected capacity expansion.
Value List +11.7% YTD
The Value portfolio continued to be buoyed by index stock picks particularly Yangzijiang and CapitaLand, which notched double digit returns year-to-date.
SIA Engineering recently set up 49:51% line maintenance JV with NokScoot Airlines to commence operations in Don Mueang Int'l Airport and will subsequently expand to other key airports in Thailand.
Meanwhile, ST Engineering is making a strategic acquisition of Belgium-based Newtec Group to expand its satellite comunications capability. When completed in 2H19, Newtec is expected to generate $200m value creation from revenue/cost synergies.
Yield List +17.8% YTD
The March performance was partly driven by semicon equipment contract manufacturer, UMS along with the strong recovery in tech stocks in general, as well as the surprise 5% dividend hike by key customer, Applied Materials.
During the month, Maybank KE also initiated a Buy on Manulife US REIT with a TP of US$1.00 for its attractive forward DPU yield of 7%, backed by its diversified portfolio of seven US freehold office properties that possess strong demand-growth fundamentals.
Note: * Including dividends
** Priced in USD
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This document is being distributed for general information only and it does not constitute an offer, recommendation or solicitation to enter into any transaction or adopt any hedging, trading or investment strategy, in relation to any securities or other financial instruments. This document is for general evaluation only, it does not take into account the specific investment objectives, financial situation or particular needs of any particular person or class of persons and it has not been prepared for any particular person or class of persons.
Opinions, projections and estimates are solely those of Maybank Kim Eng Securities at the date of this document and subject to change without notice. Past performance is not indicative of future results and no representation or warranty is made regarding future performance. Any forecast contained herein as to likely future movements in rates or prices or likely future events or occurrences constitutes an opinion only and is not indicative of actual future movements in rates or prices or actual future events or occurrences (as the case may be).
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